Prosecutors are considering whether to bring criminal charges over the death of a Red Arrows pilot killed when the ejector seat of his jet fired as the plane sat on the tarmac at an RAF base.

Flight Lieutenant Sean Cunningham, 35, was thrown 200ft in the air and then fell to the ground still strapped to the seat of his Hawk T1 plane without his parachute opening. He was airlifted to hospital where he was pronounced dead.

The death in November 2011 was the second in three months for the world famous aerial stunt team, a toll that raised questions from the independent Military Aviation Authority (MAA), which has had concerns about the level of oversight and scrutiny of the elite unit.

Cunningham was fatally injured at RAF Scampton, the Red Arrows headquarters in Lincolnshire, and a full inquest was suspended pending the results of the police inquiry.

The Red Arrows Hawk jet is made by BAE Systems but the ejector seat is manufactured separately by Martin-Baker, a British firm that is the world's leading supplier of the equipment.

Shortly after Cunningham's death, Martin-Baker issued a statement saying: "We have had the opportunity to examine the seat and, while not wishing to pre-empt the outcome of the investigation currently under way, are satisfied that neither a mechanical nor a design fault were to blame for the fatality."

The Guardian understands detectives, who were helped by specialists from the MAA, sent an initial file to the Crown Prosecution Service in November, but updated it in January with new evidence.

Sources said the police were seeking clarification on whether any criminal charges should be brought. It is thought potential offences could range from flaws in the manufacturing or servicing of the aircraft, up to corporate manslaughter, which, if a charge were to be brought, would apply to the Ministry of Defence (MoD).

The police refused to say what recommendations they had made, but at an early inquest hearing, the officer leading the inquiry, Detective Superintendent Shaun West, confirmed he was looking specifically at why the cockpit ejector seat activated and why the parachute mechanism did not work.

A spokeswoman for Lincolnshire police said: "We conducted an investigation into the death of Flight Lieutenant Sean Cunningham and a file has been completed and sent to the CPS. We have gathered facts in relation to the investigation and the decision lies with the CPS as to whether any criminal offences have been revealed."

A CPS spokeswoman added: "We have received a file of evidence from Lincolnshire police in relation to the sad circumstances of Sean Cunningham's death, which we are currently considering."

The MoD admitted it was "aware that a referral has been made to the CPS", but a spokesman said it was not appropriate for to comment at this stage. "Our thoughts remain with the family and friends of Flight Lieutenant Cunningham," he added.

The death of Cunningham has bewildered senior RAF officers who say the ejector seat in a Hawk is almost impossible to activate accidentally, requiring considerable pressure from the pilot. The parachute should have opened regardless.

Cunningham's pedigree is not in doubt – he was an experienced pilot with an exemplary record, who had flown in the Iraq war on close air-support missions for British and US ground troops.

If the CPS decided to prosecute, it would be a blow to the reputation of the RAF and to the Red Arrows, whose future has been questioned as the armed forces has made deep cuts since the 2010 Strategic Defence and Security Review.

Though David Cameron has said the team will not be axed, safety and supervision of the team has been under scrutiny after a number of accidents and deaths unprecedented in the team's 50 year history. Before 2011, there had not been a fatality for 23 years.

Cunningham's death came three months after another Red Arrows pilot, Flight Lieutenant Jon Egging, 33, was killed at the Bournemouth Air Festival.

An inquest heard Egging was close to losing consciousness at the end of a routine because of the G-forces he was experiencing, though investigators also found that two zips on his flying suit – which help reduce the effects on his body – were slightly undone.

An inquest heard it was impossible to tell whether the suit had come loose before or after the accident, but an inquiry also found there was nothing wrong with the aircraft at the time of the crash. A coroner gave a verdict of accidental death.

After Cunningham's death the MoD implemented a temporary ban on non-essential flying in aircraft with ejector seats similar to those in the Hawk T1. The Red Arrows have used the dual control BAE Systems Hawk T1, which has a top speed of Mach 1.2, since 1979.

A pre-inquest hearing into the death of Cunningham will be held on 3 May at the Lincoln Cathedral Centre.